Reasons Why You Need A Diligent Yonkers Tax Preparer
Whether you earn $50,000 a year or 50 million dollars, taxes are a big expense. This is one of the reasons why many individuals hire the services of a tax expert to help them prepare their returns. Furthermore, a tax professional can advise about the best way to structure certain financial transactions over the course of the year to help reduce your tax bill. This is what is known as tax planning. In the majority of cases, unless you happen to have a background in accounting, knowing the most effective methods for reducing taxes is very difficult.
CPAs (Certified Public Accountants) attend school and complete tough exams to ensure they know all there is to know about tax law. While it may take you several hours to identify one tax credit, a CPA is likely to already know about all the tax credits applicable to your situation. It is for this reason that more than 60% of taxpayers hire a professional when tax time approaches.
If you’re still not sure, read through the following 6 triggering events to discover more about why hiring a tax professional is likely to be in your best interests:
1. You’re Running Short On Time
The tax filing process should never be rushed. If you wait until the last minute to start completing your taxes, there’s a good chance you’ll find yourself short of time. Tax season can be the busiest time of year for many businesses and rushing the tax filing process restricts your ability to avail of all possible tax deductions or tax credits.
Effective tax preparation requires a lot of research. If you are looking to pay the least possible amount (who isn’t?), you need to know your way around IRS forms and tax law. If you aren’t a CPA, it’s very unlikely that you will be acquainted with all the ways you can reduce your bill. The same rings true for those who own businesses. Time for business owners is particularly limited as the tax filing deadline approaches. From managing your customers, employees, and business operations, time is precious. While tax time happens at the same time each year, it always seems to be inconvenient.
2. You’re One Of The Millions Of 1099 Contractors
Do you get 1099-MISC forms from the IRS at the close of each tax year? Do you run your own business? If so, you require a tax preparation service. Compared to a typically W-2 employee, 1099 contractors have more going on. There are multiple expenses surrounding your business. And, if you don’t keep track of those expenses, you will miss out on thousands, if not tens of thousands, of dollars in tax savings. Are some of your customers spending more than $600 with your business each year? Depending on the sector, all of your business’s customers could be paying you dramatically more than that. In many cases, those customers should be issuing 1099-MISCs to you at the start of each year.
The 1099-MISC form reports the total income they paid you during the previous tax year. 1099-MISC is required for all contractors to file taxes. The income on your tax return is calculated from the figures on all the 1099s you receive.
3. You Have Outstanding IRS Issues
The feared letter. Sent from the dreaded IRS. The IRS will never call you or email you demanding immediate payment. They will, however, send you a letter in the mail. Contained in the letter is typically a date, relevant tax years, reference number, your personal details, and all the penalties, taxes and interest fees you owe. No one wants to get such a letter, but things can happen. Often due to an omission, error, or suspected fraud on your previous year’s tax return. It doesn’t matter if you file your taxes through a tax firm, you are ultimately responsible for all information submitted on your return. However, a CPA or tax firm can represent your case to the IRS. For instance, you might not agree with the amount the IRS states that you owe. In such a case, a CPA can represent you as you face the IRS. A licensed CPA will build a case advocating in your favor that is most likely to be received in good faith by the IRS.
CPAs along with other tax services are there to help you avoid an IRS dispute going to court. CPAs know how to get penalties reduced or eliminated from your account. They often have decades of experience communicating with the IRS in a way that doesn’t incriminate their clients and helps them to get back on the good side of the IRS. The reality is that you can go to jail over IRS tax issues. Do you want to find yourself facing the IRS in court without legal representation? Of course not! It would be foolish to try to fight the IRS alone.
4. You Have Fallen Behind On Your Taxes
If you have fallen behind on your taxes and have not received a letter from the IRS, you should not assume the storm has passed. The IRS has up to 7 years to challenge you on your taxes for any specific year. And, if you haven’t yet received a letter from them, you better believe it will arrive soon, especially if you owe the IRS taxes. It will be much better for everyone if you file for any missed years instead of waiting for a dreaded IRS letter. To make sure everything is completed correctly, you should hire an accountant to file taxes from prior years on your behalf.
5. Big Life Changes
If you are experiencing a major life event, such as a death in the family, a divorce, a life-threatening medical diagnosis, etc., outsourcing your taxes is a good idea. Whether you’re getting divorced, buying a new home, having a child or getting married, the way your taxes are completed will change. If you got married, for example, during the year, there will now be more options open to you when it comes to tax credits and tax deductibles. You and your spouse could file jointly or separately. Each option offers different credit eligibility and deduction thresholds. In some situations, it can be more advantageous to file separately rather than jointly. An accountant can outline the differences for you and help you choose the best option.
6. Not Just A Tax Nerd
A CPA can help you with a lot more than just filing your taxes. Generally, a licensed accountant can act more like a financial strategist for you. That can provide you with expert financial advice regarding business expansion, retirements, or investments. Accountants have clients from all types of industries and their widespread knowledge can provide you with valuable insight beyond your tax return.